Fuel Procurement Prozorro

Any government and commercial companies with their own logistics facilities are faced with the need for regular fuel purchases. Today, due to the presence of electronic trading platforms, such as SmartTender.biz, it is possible to buy fuel using a simpler and more convenient scheme.

Difficulties in Fuel Purchases

Prices for fuel and lubricants are subject to significant seasonal fluctuations. For example, annually in the spring, with the beginning of a sewing campaign, prices for diesel fuel, spurred by increased demand from farmers, traditionally increase.

In addition to seasonal, there may be unforeseen fluctuations, moreover, rather significant ones. For example, in the summer of 2018, the fuel first fell sharply by 10-15%, and then, in August, it rose by almost 35%. In such circumstances, it is difficult to ensure timely deliveries within the allocated budget. From the announcement of bidding to the receipt of the subject of purchase, it usually takes at least 1.5 months.

Another source of difficulties when working with fuel tenders is to check gasoline and other petroleum products for compliance with requirements and standards. The customer has to find a balance between permanent work with specific suppliers (which reduces competition and raises the price tag) and regular in-depth testing of each supplier and his product. This is especially inconvenient to the organizers of commercial bidding since they also pay for the maintenance of their purchases.

Ways to Simplify Fuel Purchases

In both commercial and public auctions, there are ways to circumvent the usual problems of purchasing fuel materials.

Purchases for the Year Ahead

The purchase of combustible materials for the whole year ahead (or for any other long period of time) has both advantages and disadvantages. Of the main advantages – the ability to purchase at the time of seasonal price cuts and receive discounts for volumes. The main condition for the success of this approach is a deep analysis of the market.

However, such a large amount of petroleum products needs to be stored somewhere, and the total cost of the annual volume of fuel will be feasible for the budget of only very large and efficient institutions. To solve the problem of transportation and accumulation of large volumes, you can replace the physical purchase with the purchase of fuel vouchers, for which, and the amount of the payment can be broken down into acceptable regular payments. But then, in addition to the price, potential suppliers will also have to be screened out according to the actual readiness to meet the customer’s requirements.

Framework Agreements

Since March 2019, the ProZorro public procurement system has a very convenient tool that helps to establish fast and competitive purchases of fuel and other similar products - framework agreements. This mechanism operates according to the following algorithm:

The customer announces an intention to enter into a framework agreement with potential suppliers of the subject of future bidding.
Interested participants submit their applications, declaring their intention to join the agreement.
The organizer checks the participants' information for compliance with their own requirements (for example, a brand of fuel, technical indicators, octane number, etc.) and selects suitable ones.
An agreement is signed that the remaining participants undertake to participate in the future procurement procedures of the customer.

In the future, the organizer need only regularly publish procurement with an agreed frequency. It will not be necessary to conduct qualifications and other lengthy procedures, because deliveries will be carried out as soon as possible after the auction - literally within a few days. For example, just such a system was successfully organized by Ukrposhta. In the relevant section of the site, you can read the instructions on the framework agreements.